Video poker first became commercially viable when it became economical to combine a television-like monitor with a solid statecentral processing unit. The earliest models appeared at the same time as the first personal computers were produced, in the mid-1970s, although they were primitive by today's standards.

Video poker became more firmly established when SIRCOMA, which stood for Si Redd's Coin Machines, and which evolved over time to become International Game Technology, introduced Draw Poker in 1979. Throughout the 1980s, video poker became increasingly popular in casinos, as people found the devices less intimidating than playing table games. Today video poker enjoys a prominent place on the gaming floors of many casinos. The game is especially popular with Las Vegas locals, who tend to patronize locals casinos off the Las Vegas Strip. These local casinos often offer lower denomination machines or better odds, although this was more common in the 1990s as casinos across the country have recently been cutting their paytables and/or only offering 25 cent machines or higher.[citation needed]

After inserting money (or a barcoded paper ticket with credit) into the machine, play begins by placing a bet of one or more credits and pressing the "deal" button. The player is then given cards and has the opportunity to discard one or more of them in exchange for new ones drawn from the same virtual deck. After the draw, the machine pays out if the hand or hands played match one of the winning combinations, which are posted in the pay table.

Pay tables allocate the payouts for hands and are based on how rare they are, the game variation, and the decision of the game operator. A typical pay table starts with a minimum hand of a pair of jacks, which pays even money. All the other hand combinations in video poker are the same as in table poker, including such hands as two pair, three of a kind, straight (a sequence of 5 cards of different suits), flush (any 5 cards of the same suit), full house (a pair and a three of a kind), four of a kind (four cards of the same value), straight flush (5 consecutive cards of the same suit) and royal flush (a Ten, a Jack, a Queen, a King and an Ace of the same suit).[1]

Some machines offer progressive jackpots, or other unique bonuses, thereby spurring players to both play more coins and to play more frequently. Maureen O'Connor, former mayor of San Diego, made and then lost over a billion dollars playing video poker. [2]

Some locales offer games that appear to be video poker, but are actually just front-ends for random drawings similar to a slot machine. These are known as "video lottery terminals" and sometimes have "VLT" somewhere on the machine face. The result of any deal is predetermined before the first cards are dealt. If you intentionally throw away a winning hand, a "magician" appears and replaces the losing result with a hand that pays the predetermined amount. Since there is no way to determine the payout of these machines from the given pay table, playing these machines is no better than playing a slot machine.

There are many variations of video poker. They include Deuces Wild, where a two serves as a wild card; pay schedule modification, where four aces with a five or smaller kicker pays an enhanced amount (these games usually have some adjective in the title such as "bonus", "double", or "triple"); and multi-play poker, where the player starts with a base hand, and each additional played hand draws from a different set of cards with the base hand. (Multi-play games are offered in "Triple Play", "Five Play", "Ten Play", "Fifty Play" and "One Hundred Play" versions.)

In games which do not have a wild card a player on average will receive the rare four-of-a-kind hand approximately once every 500 hands, while a player may play tens of thousands of hands before an extremely rare royal flush, which usually has the highest payout.

Video poker games online are now available in the USA in 3 different states. These include New Jersey, Delaware and Nevada. Players in all three states are able to enjoy fully regulated online video poker games on the proviso that they are physically present in the respective state, of legal age to gamble and can validate their identity.

When modern video poker games first appeared, the highest-paying common variant of a particular game was called "Full-Pay". Game variants that returned a lower payback percentage were termed "Short-Pay". Though the term Full-Pay is still in use, today, there are many game variants that return more. Payback percentage expresses the long-term expected value of the player's wager as a percentage if the game is played perfectly. A payback percentage of 99 percent, for example, indicates that for each $100 wagered, in the long run, the player would expect to lose $1 if they played every hand in the optimal way. Some Payback percentages on full-pay games are often close to or even in excess of 100 percent. Full-pay Jacks or Better, for example, offers a payback percentage of 99.54%.

Casinos don't usually advertise the payback percentages, leaving it up to the player to identify which video poker machines offer the best schedules.

The payoff schedules for most video poker machines are configured with a pay schedule that pays proportionally more for certain hands (such as the Royal Flush) when the maximum number of credits (typically 5 coins) is bet. Therefore, players who do not play with the maximum number of credits at a time are playing with a smaller theoretical return.

"Jacks or Better," sometimes simply called "Draw Poker," is the most common variation of video poker. Payoffs begin at a pair of jacks. Full pay Jacks or Better is also known as 9/6 Jacks or Better since the payoff for a full house is 9 times the bet, and the payoff for a flush is 6 times the bet. [3]

All American is based on Jacks or Better with an increased payout for flushes, straights and straight flushes, but reduced payout for full houses and two pairs (8-8-8-3-1 versus 9-6-4-3-2). The full pay version (quads return 50 bets), once common but now rare, is one of the highest return versions of video poker offered, but the play strategy is very complex and mastered by few.

"Tens or Better" is a variation of 6/5 Jacks or Better. The minimum paying hand is a pair of tens, rather than a pair of Jacks. Strategy is similar between the two games, in spite of the very different full house and flush payouts.

"Joker's Wild", as the name implies, adds a joker to the mix. The joker is fully wild and substitutes to make stronger hands. The inclusion of the wild joker also adds another winning hand in 5-of-a-kind. The game's name inspired a game show of the same name.

"Deuces Wild" is a variation of video poker in which all twos are wild. (Wild cards substitute for any other card in the deck in order to make a better poker hand). In Deuces Wild, the payout for a four of a kind makes up approximately ⅓ of the payback percentage of the game, and a four of a kind occurs on average approximately every fifteen hands. Deuces Wild can be found with pay schedules that offer a theoretical return as high as 100.8 percent, when played with perfect strategy. This full-pay version is found only in Nevada.(2) It is also available with other pay schedules that have lesser theoretical returns:

"Bonus Poker" is a video poker game based on Jacks or Better, but Bonus Poker offers a higher payout percentage for four of a kind. The full-pay version of this game returns 99.2%. (3) The game has multiple versions featuring different bonus payouts based on the ranking of the four of a kind.

"Double Bonus" video poker is a variation of Jacks or Better with a bonus payout for four aces. This variation offers up to a theoretical return of 100.2 percent, when played with perfect strategy — however, this % is only on a "10/7" version video poker game (10/7 being the payouts for a full house and a flush). There are many other video poker varieties of 10/6, 9/6, etc. that have slightly lower than the most generous 10/7 version payout. Although the full-pay version has a theoretically-positive return, few play well enough to capitalize on it. Double Bonus is a complex game.(4)

It is also available with other pay schedules that have lesser theoretical returns:

"Double Double Bonus" video poker is a variation of Jacks or Better which offers bonus payoffs for different four of a kinds, as seen in the payout table below. Full pay Double Double Bonus can be found with pay schedules that offer up to a theoretical return of 100.1 percent, when played with perfect strategy. It is also available with other pay schedules that have lesser theoretical returns:

Often casinos choose to use pay tables which reduce the maximum payout percentage as compared to other commonly available game variants. This increases the house edge, and thus brings in more revenue for the casino.

9/5 Jacks or Better is a low pay version of the game. The payout for making a Flush is cut from 6x your bet to 5x your bet, but all other payouts remain the same. This reduces the maximum payout percentage to 98.45% for players betting five coins per hand to receive the Royal Flush bonus.

8/6 Jacks or Better is another often used pay table for Jacks or Better games. The payout for making a Full House is cut from 9x your bet to 8x your bet, while all other payouts remain the same as in a full pay game. This reduces the maximum payout percentage to 98.39% for players betting five coins per hand to receive the Royal Flush bonus.

8/5 Jacks or Better cuts the Full House payout from 9x your bet to 8x your bet, and also cuts the Flush payout from 6x your bet to 5x your bet. All other payouts remain the same as in a full pay game. This reduces the maximum payout percentage to 97.30% for players betting five coins per hand to receive the Royal Flush bonus.

7/5 Jacks or Better cuts the Full House payout from 9x your bet to 7x your bet, and also cuts the Flush payout from 6x your bet to 5x your bet. All other payouts remain the same as in a full pay game. This reduces the maximum payout percentage to 96.15% for players betting five coins per hand to receive the Royal Flush bonus.

6/5 Jacks or Better cuts the Full House payout from 9x your bet to 6x your bet, and also cuts the Flush payout from 6x your bet to 5x your bet. All other payouts remain the same as in a full pay game. This reduces the maximum payout percentage to 95.00% for players betting five coins per hand to receive the Royal Flush bonus.

Other kinds of video poker only have positive theoretical returns when the progressive jackpot is high enough. Many establishments advertise with a billboard when the progressive jackpot is high enough. Otherwise sub-optimal games like 8/5 jacks or better can become positive expectation when the jackpot is large enough.